Bottom Line

SAP Business One Professional has good features and flexibility overall, but is designed as an "old school" enterprise resource planning (ERP) platform.
It may be too complex for many users especially small to midsize businesses (SMBs).

28 Feb 2018Ted Needleman

SAP SE is a venerable German software maker catering mainly to Global 1000 companies and specializing in cutting-edge databases, enterprise resource planning (ERP), and financial software, including general ledger accounting. SAP ERP (formerly SAP R3) is one of the most widely implemented ERP applications in the global marketplace, and sticks to a traditional implementation path typically requiring extensive customization, multi-year implementation paths, and hundreds of thousands of dollars in consulting fees.

That said, for this review, we're looking at SAP Business One (which begins at $82 per user per month for the hosted Professional edition); it represents the company's small to midsize enterprise (SME) offering. We test it from both the general financial accounting and ERP perspectives. The version I tested was SAP Business One for SAP's own HANA database and analytical engine; however, Business One is also available in a Microsoft SQL Server version (in case you're more comfortable with that). However, only Business One for HANA offers multicurrency capability while the Microsoft SQL Server version is designed for use solely in the US.

Most SME accounting and ERP systems still take a modular approach, allowing you to piece together financial accounting, customer relationship management, human resources (HR) management, and complex inventory management. SAP Business One Professional (which is also available at $3,145 for an on-premises Professional user license) has a solid accounting core, but integrates functionality in all of these other areas seamlessly across multiple modules (which means you may buy a lot more than you're actually intending to use), such as its benefits administration (BA) module detailed later in the review.

That trait alone elevates Business One's complexity meter but the software's focus on supporting intricate and highly customizable business and operations requirements makes it even more complicated. If your business can benefit from this level of customizability and you don't mind a heavy upfront learning and implementation curve, then SAP Business One is very much worth the effort. Businesses looking for something a little more simple and designed for the cloud will be better off with Editors' Choice winners Intacct (on the financial accounting side) and NetSuite OneWorld (for all-around ERP systems).

Don't Think of It as a Dashboard

I tested Business One using a Remote Desktop Connection (RDP) to an SAP server running the HANA version. While this test account was maintained on SAP's own servers, it's important to note I was working with the on-premises version of the software, installed on virtual servers and hosted in the cloud. The SAP Business One Cloud version is a different animal, one designed specifically for cloud-only, browser-based access running a service layer managed entirely by SAP.

That's likely one reason I had trouble accessing my test instance using the browser. SAP maintains it is also accessible using the Firefox web browser, which is currently (and surprisingly) the only web browser supported. That never worked for me, but SAP assures me they're working on it. Regardless of how you access the system, the first screen you'll see is SAP's "Cockpit" dashboard. The Cockpit is highly customizable, displays pertinent user-level data, and serves as a useful portal for navigating the system as a whole.

This navigation system consists of three parts—a ribbon bar at the top of the Cockpit, a vertical menu sidebar on the left side of the screen, and the widgets displayed on the dashboard. The top ribbon bar is an easy way to parse through records. For example, if you're in the Purchase Orders file, there are arrows in the toolbar to move forward and backwards.

The left sidebar menu can take you to any transaction, data entry screen, or report in the system. It's divided into Functional areas such as Administration, Financial, Sales, Purchasing, Opportunities (essentially CRM), and others including a section labeled Reports. Inventory and Payroll are also on the main menu. Clicking on a heading opens up sublevels. You can enter or view transactions, or generate reports including basic financial statements. SAP Business One provides three of the four basic financial statements. A separate Statement of Changes in Retained Earnings isn't one of the reports, but it's easy enough to generate in Microsoft Excel if you actually need it.

The Cockpit also provides yet another way to enter, access, and report data. Widgets on the screen are movable, which means you can add and delete them depending on individual user needs, and there are a considerable amount of prebuilt widgets available. You can also edit existing widgets or create your own containing information you need for your particular position. Hovering on a data point in a widget brings up a small screen with more detail on that data point. This is defined in the widget, and like most aspects of the system is editable and customizable. Overall, this widget-style of data representation is typical in larger accounting and ERP applications, and you'll find it in much of the competition, including even cloud-centric apps like Intacct or NetSuite OneWorld. You can create new widgets using the Pervasive Analytics choice in the sidebar menu.

Two of the widgets are particularly notable. The Common Function widget is a table of shortcuts to operations you perform most frequently. I found it a convenient way to set up a custom set of shortcuts for a specific person, though it would also be applicable at the departmental level. Another valuable widget is the Workbench. The Workbench is composed of all of the documents and reports pertaining to a specific workflow. In the test company I created for testing, this widget was set up for the Sales Process and was essentially a flowchart through the entire process, from generating an estimate through the Accounts Receivable system. There's a small down arrow bubble next to the icon for a sub-process and clicking on it brings up the reports pertaining to that part of the workflow. Four workbenches are provided—sales, purchasing, inventory, and financials.

There are two other navigation aids I used frequently during testing. When a chart window is open, right button-clicking or double-clicking on the row number brings up all of the details on the row transaction. There is often considerably more data detail than that shown on the open window. Some of the row entries will also have an orange arrow pointing at one or more of the items shown in the row. This indicates that you can drill down into that piece of data. For example, on a report showing an inventory item, clicking on the orange arrow would bring up the description, location, and cost of the item as well as number in stock or if the item is on backorder.

Regardless of your organizational structure, the account numbering system is flexible enough to handle it. SAP Business One provides four default account segments (the overall account, division, region, and department) and you can define up to 10 segments to provide more account granularity.

For my general ledger accounting testing, I primarily looked at the General Ledger section of the overall system, but SAP Business One Professional has equally powerful Accounts Payable and Receivable, Payroll, Fixed Assets, and Inventory. Inventory in particular is where entry-level accounting systems often fall short. Business One's Inventory system provides the ability to use different costing methods on different types of inventory items, and provides kiting and BOM (bill of materials) processing as well.

Multicurrency capabilities in the HANA version of the application are robust, and you can keep currency divisions in other geographic areas, converting into US currency at period closing. Business One only does this real-time conversion at a period closing, but can simulate an approximation of the conversion for mid-period reports. Depending on your needs, the inability for true real-time currency conversion at any day or time might present a problem, though for most users the end-of-period conversion using day-of-closing valuation will be sufficient.

Good to Go?

There's both good and bad news for mobile users. The bad news: at the time of this writing, the web-based version of SAP Business One Professional supports only a single browser—Mozilla Firefox. The good news is that Firefox is available for iOS, Android, Windows, and Mac operating systems. However, SAP is still ironing out this access capability. In my testing, I was unable to access the SAP Business One system using Firefox, even from my PC.

SAP is aware of these problems, has the resources to bring to bear, and knows the value of mobile access and BYOD (bring your own device), so I have little doubt that mobile access will be up and running in a short time. I would advise, however, if this feature is important to your business, you make sure the reseller you're working with can demonstrate working Firefox access on your devices.

Benefits Administration

In our deeper look at SAP Business One's other, optional modules and capabilities, we started with accounting and then moved down the alphabet to benefits administration. As with all of the other add-on modules your business can incorporate into the SAP platform, the Benefits Management module is highly configurable for complex and granular benefits plans and packages across enterprises. A subcomponent of the mySAP HR module, the BA module is integrated with SAP's Payroll module and relies on a flexible framework and automated workflows to streamline HR administration.

The module is broken down into a few key components. For benefits administrators, SAP offers a set of tools that includes an enrollment wizard to configure custom plans and benefits across medical, dental, and vision coverage. It also includes an eligibility checker tool and integrates with major plan providers to pull in coverage details. As with BA software such as BambooHR and Namely, the module also includes benefits reporting features to aggregate and summarize benefits data across employees and plans, along with the ability to build custom benefits reports.

On the employee side, the BA module sports an Employee Self-Service portal where users can view their benefits plan and coverage, and make changes to their benefits selections. The module doesn't go too deep into premium benefits and perks, but it does cover basic health plans, insurance plans, Flexible Spending Accounts (FSAs), and savings plans such as 401k.

The user experience (UX) is consistent with SAP's design principles, which means it has an old-school, barebones design similar to that of Fairsail HRMS. It offers deep granular customization using SAP's proprietary display schemas and infotype parameters. The module overall is a valuable addition to an organization's all-in-one ERP capabilities, though its standalone BA value and execution is a far cry from the features, functionality, and intuitive UX of Editors' Choice Zenefits.

A Good Relationship Is Important

CRM is a key component of any modern enterprise sales organization—so much so that SAP decided not to label its CRM functions "CRM" but instead labels them "Sales Opportunities." Customers (and potential customers) are set up in the Sales Order section of the system, imported from Microsoft Outlook, or entered through a Sales Opportunity screen. The Sales Opportunity screen lets you import an existing customer or lead by clicking in the "Business Partners Code" field, which then displays a list of business partners. Other fields in this record let you enter the opportunity (that is, what items or services you want to pitch), anticipated closing date, and the stage of that sales process.

Sales stages are taken from a table you create that stages the sales process from lead through meetings and quotations or other milestones, and (hopefully) finally ending with an order. You also enter an estimated Closing Percentage at each stage. You don't have to go through each stage with every lead, but the closing percentage is used to forecast the likelihood of actually obtaining an order. How useful this is depends largely on your own estimating metrics but Business One's approach is certainly interesting.

The SAP Business One "To Go" documentation, which is a basic user guide, lays this process (and others) out in detail, and is a must-read document for any business considering the software system. As with any CRM application, SAP Business One has the ability to create and manage campaigns, mainly via its Campaign Management wizard, which I found easy to use. Also included as part of the sales process is the ability to create and maintain service contracts, customer equipment cards, and create service calls.

Strong Inventory Management

SAP Business One Professional is obviously good at managing a wide variety of sales organizations, but it's also good at managing light production and warehousing entities—although its abilities do fall a bit short of those that specialize in this vertical, such as Epicor.

SAP Business One Professional's inventory is particularly well-suited for the small to midsize enterprise (SME) market. However, while it does have some features needed in a production inventory chain, it does not provide enough to support a true shop-floor operation. Still, even within the Inventory module, the SAP Business One Professional system has extensive analysis and predictive capabilities.

The Materials Resource Planning (MRP) module, which is missing in several entry-level systems such as Cougar Mountain Denali Summit, enables you to perform a fair amount of analysis and forecasting, and those capabilities are then strengthened further in the Intelligent Forecast function. This function uses either "Triple Exponential Smoothing" or "Linear Regression with Damped Trend and Seasonal Adjust" to produce accurate forecasts of your future sales and inventory needs, with the app picking the most appropriate method given the amount and type of data you enter. This forecast result can be used as input to the MRP Wizard that walks you through the process of entering the parameters required to generate a forecast on orders and the inventory needed to fulfill them (i.e., purchase orders). Or, if you're using it with the Production modules, then on the production orders necessary to produce the inventory that then fulfills sales requirements. You can set minimum and maximum stock levels, and perform Economic Order Quantity (EOQ) analysis to maintain the optimum stock level to meet forecasted sales, while minimizing overall costs and the probability of an out-of-stock condition.

For costing your inventory, SAP Business One Professional provides functionality for all four major costing methods, including First-In First-Out (FIFO), Moving Average, Stand Cost, and Serial/Batch costing. The Serial/Batch costing method enables you to assign a cost to individual items in inventory, which is essentially Specific Item Costing. What you won't find is support for the Last-In First-Out (LIFO) method, but this way of doing things has fallen out of favor so it's unlikely that newer, smaller operations would need it.

The Inventory features in SAP Business One Professional are oriented around the warehouse. You can specify a warehouse as a drop-ship warehouse, as a bin warehouse, or as simply a "warehouse." Once specified as a bin warehouse, however, every item must be assigned to a bin, although you can have a "general" bin that can contain multiple different items. Once a warehouse is set up with bins, every transaction (receipt, delivery, transfers, order of production, or purchase) must have a bin number related to it. Bin numbers can be bar-coded and the system can maintain Bill of Materials (BoMs), kitting, and pick lists using those bin assignments. BoMs are created and maintained in the Production module, although Inventory, Sales, Purchases, MRP, and Production are all tightly integrated and these features flow between the modules depending upon the specific item and transaction a user is accessing.

SAP Business One Professional doesn't provide a huge number of canned reports, although it does contain the reports you're most likely to use often. And you can specify which inventory-related key performance indicators (KPIs) you want displayed on the Inventory landing page, which is also useful. If you require custom reporting, then remember that the reporting engine for most SAP products, including Business One Professional is Crystal Reports, which is actually an SAP product. While this is a great reporting tool, it's not especially easy to use. So having someone in-house or a consultant versed in this reporting app is probably a good idea.

Overall, as with the other components of SAP Business One Professional, I found the Inventory module a bit difficult to use at times. Some of the data screens can be obtuse and unintuitive, and it isn't always clear what to enter in a field or where to find the required data. Still, offsetting this is a very comprehensive Help system and excellent documentation for those willing to put in the effort.

Above and Beyond

SAP Business One provides a comprehensive and sophisticated financial system that also easily extends to add the functions of a true ERP system, including modules for production, HR, CRM, and MRP. There's even the capability to track projects and perform predictive business analytics by using advanced features of the SAP HANA database.

The downside of all this capability is that the overall system is fairly complex. Getting to a particular function is easy. There are usually multiple ways to get to a particular transaction or report, and multiple layers of drill-down, which means you can get as granular as most users will want or need. The comparison chart shows about 150 standard reports available, though this figure is a bit deceptive. As with all of the report options available, you can pretty much get any type of report you want or need.

However, in many cases having all the available report options on several levels can make generating a nonstandard report a considerable task. Fortunately, it's very easy to export a report to Microsoft Excel and manipulate it there. Crystal Reports is also available, and if you have someone at your business with experience in this application it may be easier to generate some of your reports with that. The underlying database of both Microsoft SQL Server and HANA is accessible through the system's Studio Manager, which allows you to form complex queries as well as generate forms screens and create widgets.

The Bottom Line

An overabundance of riches is not uncommon in SME systems, and SAP Business One suffers from this "malady" as do many of the other SME ERP systems included in this roundup. And with all of them, the solution is to go into the implementation with a clear idea of what roles your staff and the reseller/partner will play in installing and configuring the system.

Finally, one of the most important factors in moving to a system like SAP Business One is to realize that getting up and running smoothly won't be quick. With smaller accounting apps like QuickBooks and many of the newer midrange, cloud-based accounting systems, you can install the system yourself or with the help of your accountant in a few days, and train someone to use it in a just day or two. Don't expect that to be the case with SAP Business One or any of the other midrange apps tested in this roundup, especially if they're built around more traditional ERP-style frameworks, like Open Systems Traverse.

Realistically, you should plan for implementation, configuration, and testing to take several weeks. You should also get a clear quote from your SAP partner or VAR as to how much these services will add to the system's overall cost. To get some idea of what's involved in using and modifying the application, turn to YouTube. There are dozens of demos and tutorials, which should give you a decent idea of what you can expect.

SAP Business One is a robust system, and with the right reseller/partner will be an excellent choice for many SMEs. Keep in mind, however, your business will need both accounting and IT expertise to really make productive use of the system.

SAP Business One Professional

Bottom Line: SAP Business One Professional has good features and flexibility overall, but is designed as an "old school" enterprise resource planning (ERP) platform. It may be too complex for many users especially small to midsize businesses (SMBs).

About the Author

Ted Needleman has been covering the world of technology for almost 40 years. He writes frequently on software, hardware, and technology-related subjects. He has been a programmer, accountant, Editor-in-Chief of Accounting Technology magazine, and the director of an imaging and printing test lab. He has been performing reviews for PCMag since the 1990s. See Full Bio